Market Outlook - October 2024

During the month of October market performance was slightly more encouraging with roughly 250 stocks outperforming the S&P 500 and about 200 delivering a positive return. Market breadth also continues to show improvement as investors rotate out of the top performers into other sectors where lagging stocks offer good potential and exhibit undervalued qualities. We see this trend continuing into year-end and believe this will be the tailwind to sustain the market momentum as we enter the last two months of the year, which are historically two of the best months. 

While the TSX gained a modest 0.9% on a total return basis in October, the catch-up trade for Canadian stocks helped the TSX outperform the S&P 500 for the second month in a row. We see this trend continuing for the remainder of the year, which gives the TSX a slight advantage over the much broader S&P 500. Research shows there remains significant breadth and relative value in Canada, leaving it well-positioned to benefit from the rotation occurring in the U.S. markets. In addition, Canadian equities display strong, stable cash flow, combined with a near-record relative valuation discount advantage vs the U.S. and other global markets. Bottom line, broadening U.S. performance equals a stronger TSX.

To receive a full copy of our October 2024 market commentary, please email us at msbwealth@nbpcd.com